A new toolkit developed by environmental charity World Wide Fund for Nature (WWF) and financial crime software company Themis aims to minimise financial institutions’ exposure to environmental financial crime. Launched at COP16, the Environmental Crime Financial Toolkit is an open access platform that seeks to equip firms to detect and monitor illicit activity related to land conversion and deforestation by highlighting red flags and risks connected with different types of environmental and financial crimes. Designed to be integrated with existing systems, the platform aims to help financial institutions strengthen their screening capacity when reviewing existing clients, onboarding new ones, and assessing risks across the whole financial sector. According to Interpol, environmental financial crime is the third largest illegal activity globally, worth US$110-281 billion annually. In a recent survey by WWF and Themis, more than 60% of financial services professionals said that a land conversion risk policy was either non-existent (45.7%) or not yet developed or in place (18.6%) at their firm. Almost half of financial institutions sampled reported operating with or in high-risk sectors or areas, yet over a quarter said they did not undertake specific related due diligence, with only 17% monitoring or screening companies and clients on a periodic or ongoing basis. “Despite its rapid growth, environmental crime is rarely seen as a serious risk by financial institutions, but it in fact poses significant reputational and material risks to their operations, such as the potential of sanctions for enabling illegal activity,” said Tanya Steele, CEO at WWF-UK. “Environmental crime is therefore very much an economic as well as a conservation issue.”
